A Breakdown on What is a Prenup Agreement
Understanding Prenup Agreements in Virginia: What You Need to Know
A premarital agreement, also known as a prenup agreement, is a contract between two parties that is made prior to their marriage. Under Virginia law, prenup agreements are described as "An agreement between prospective spouses made in contemplation of marriage . . . and to be effective on the marriage". Va. Code Ann. ยง 20-147. Such an agreement may contain provisions that relate to a variety of topics which, under Virginia law, include:
- (1) the rights and obligations of each person in issues of property disposition after the termination of the marriage, regardless if the termination is by separation, divorce, death, etc;
- (2) the arrangement of alimony obligations;
- (3) dispositions of property upon death of one or both parties;
- (4) the making of a will, a trust, or any other manner of transfer of disposition;
- (5) the assignment of rights to property in the event of a marital tort claim;
- (6) any disposition of health care decisions in the event either party becomes incapacitated; and
- (7) the choice of law jurisdiction for the agreement and the additional possibility of a change in that jurisdiction.
Essentially, a prenup agreement (in VA law also known as an antenuptial agreement) is a way to contract in advance the terms of your marriage.
Most people who are entering into marriage are not of the belief that their marriage is doomed and that they need a way out if their relationship fails . However, a prenup agreement does not need to be rooted in the belief that a marriage will end in failure. In fact, Virginia law makes clear that parties can enter into an agreement to handle their affairs in the event their marriage does not end at death, divorce, or annulment. Instead, the agreement can simply be intended to formalize the joint desire of the parties as to how their lives will be conducted and other choices for their future. Additionally, while prenup agreements must be in writing to be enforceable, they do not have to be reviewed by a Virginia family court, either before or after the marriage.
It is important to note that unfortunately, prenup agreements have received some bad press lately. Often, the estate planning world reads about a high-profile marriage that may come to end by divorce (i.e., the Amazon.com founder’s divorce). The stories at times suggest the "evil" of prenups, where the reader is led to believe that the prenup is a contract which is derived in a way to deprive a spouse of their rights. But that could not be further from the truth with any prenup agreement. In fact, with Virginia law, just like most states throughout the country, a prenup agreement can only attempt to define the division of property acquired during the marriage. So, the touching topics of infidelity and moral issues that parties believe should also be addressed in a prenup, could not be covered in the prenup agreement. These topics would require additional discussions to avoid, of course, hard feelings.
Requirements for Legal Prenup Agreements in Virginia
While a verbal agreement may be binding between two parties, prenuptial agreements are not one of those agreements. For a prenup agreement to be valid, it must be in writing and signed by both parties. Marriage is both a verbal and a physical act. When a written contract governing the actions of the couple post-marriage is added, it may seem that the contract combines the two separate, legally binding actions of marriage and contract, but it does not. A prenuptial agreement is an ordinary contract and subject to all the legal parameters of contract law. In Virginia, a prenuptial agreement is enforceable as long as: Most importantly, a prenuptial agreement is not enforceable if either party did not sign the contract voluntarily. What that means is that there can be no duress, coercion, fraud or misconduct on the part of one or the other parties. All factors must be fully disclosed and understand prior to the signing of the agreement.
More specifically, Virginia law requires full financial disclosure from both parties during the negotiation process. Even if a prenuptial agreement is not the appropriate choice for your future, if you have already entered into a prenup agreement, it will be difficult to have it overturned if either of your attorneys does not exercise sufficient due diligence to review all property owned by you or your spouse prior to your marriage. It is difficult to argue that the prenuptial agreement needs to be invalidated because the property owned at the time of the marriage was not fully disclosed when you entered into the agreement.
A judge will not be willing to overlook the due diligence required of a lawyer when representing a client. If a fault is found with a prenuptial agreement, it could provide grounds for malpractice in the event of a divorce or the subsequent death of one of the spouses. A disappointed spouse may seek redress when a contract entered into as a result of the negligence of another fails. For this reason, a lawyer must be vigilant in ensuring all assets, including liabilities, are fully disclosed before entering into a prenuptial agreement on behalf of a client.
Pros of Having a Virginia Prenup
In addition to addressing the possibility of a divorce, a prenup can also deal with the parties’ financial security in various areas, such as the following:
Protect Your Personal Assets. One primary benefit of premarital agreements is that they allow each party to keep his or her individual assets. These assets include property owned by a spouse before marriage, like real estate and savings. It also covers any inheritances received by a spouse during the marriage. Any property valued before marriage belongs to the spouse who has the property. If a divorce occurs, the spouse who partially or fully owns that property retains his or her assets. Without a premarital agreement, the assets will likely be divided equally between both parties.
Protect Your Future. It is difficult to predict whether a divorce will occur, but it is certainly possible. The marriage could last long enough to require equitable distribution of assets (in Virginia, after 1 year of separation and filing for divorce). However, if you have a premarital agreement, you have already established what will happen to all your assets, regardless of whether you still have them in your possession when you complete the divorce process.
Clarity. Premarital agreements can resolve any questions about various aspects of your relationship, including how money will be spent and how bills will be paid during the marriage.
Possible Limitations and Difficulties Regarding Prenup Agreements
Prenuptial agreements can be challenged in court by the other spouse, and not all prenuptial agreements are enforceable. There are certain public policy concerns when it comes to prenups, among them:
- To the extent possible, the terms of a prenuptial agreement should not conflict with federal and state law. For example, your complaints about household chores will generally be of no concern to a Virginia court in a divorce proceeding.
- A prenuptial agreement cannot contain a settlement of child custody or child support, which must be determined in the best interests of the child at time of divorce.
- A prenuptial agreement cannot contain a waiver of spousal support in Virginia. Prenuptial (or premarital) agreements that contain provisions attempting to bind a party for spousal support must be examined to determine if the terms are unenforceable.
- When fraud or coercion exists at the time of the signing , a prenuptial agreement can be declared unenforceable. This is rare; instead, the problem is usually inadequate time to review the agreement.
There are also issues addressed in the Uniform Premarital Agreement Act. For example, the Act provides that a court may refuse to enforce a prenuptial agreement if the court finds that the execution of the agreement does not give each party adequate notice of its contents before the marriage or if the agreement was unconscionable when it was executed. The Act also contains numerous other provisions, only some of which deal directly with the enforceability of prenuptial agreements.
Steps to Writing a Prenup Agreement in Virginia
Creating a prenup agreement in Virginia involves several steps, all of which should ideally be completed prior to marriage. The two parties need to consult with an attorney to discuss their preferences and needs, and both should negotiate the contents of the agreement. Once they’ve hashed out all of the details, they need to sign it with all parties’ consent.
Consulting with an attorney is essential as part of the prenup agreement process. From there, the two parties can decide what they want to include, negotiate what needs to be included, and prepare to sign the document.
Once the two parties have reached an agreement, they must sign the document. This means reading it carefully and ensure that both parties agree to all of the terms. It is very important that both individuals have consulted with an attorney, or at least are aware that they have the right to consult a separate attorney prior to signing the prenup agreement. If for some reason one of the parties is unable to find an attorney, it is crucial to have a third party witness state that the terms of the agreement were explained to that individual prior to being signed.
Once the document has been signed with all consents given, then the prenup agreement is valid.
Amending or Ending Prenup Agreements
Some couples may find that the terms of their prenuptial agreement no longer reflect their current desires or circumstances. To address this, Virginia law allows for the revision or termination of prenuptial agreements, but certain conditions must be met.
In order to change the terms of a prenuptial agreement, the parties must agree to the revisions in writing. Generally, revisions made in accordance with the existing agreement can be performed without any formalities, but it is always wise to consult with an attorney prior to any changes to ensure that all conditions are met. If the revisions do not necessarily comply with the provisions of the existing agreement, then they should be properly re-issued and recorded to accord with Virginia law.
When seeking to terminate an existing prenuptial agreement, the parties may agree to do so as long as the termination is done in compliance with the original terms. If the prenuptial agreement in question drafted contains a provision that allows for dissolution, or termination , then a spouse can go through the process of terminating the agreement.
If no mention on the original agreement allows for a dissolution, then the parties will need to either issue a completely new document that terminates the earlier agreement, or petition the court to terminate the prenuptial agreement.
Virginia law also allows parties to waive any claim that does not comply with the provisions of the original agreement. Specific written documents filed with the court also satisfy any information that might even be deemed a requirement of the original prenuptial agreement.
When reaching any changes to an existing prenuptial agreement, both parties have equal power when it comes to amending and terminating. As such, unilateral decisions are typically not recognized by the court, and there is no "free" way to amend or terminate an agreement. An experienced family law attorney will be able to guide you and your spouse through the process of amending or terminating a prenuptial agreement to fit your needs.